We all, to some degree, focus our efforts on the alumni who we think are most likely to yield results. We have limited time and resources, and that makes the best use of them. Right?
Our target-the-top strategy is essentially founded on the Pareto principle: We focus on the 20% of donors responsible for 80% of total giving. And the data do bear the assumption behind this strategy out. In fact, the ratio may be even more lopsided: According to an audit of one institution's giving data, the top 10% of donors accounted for over 95% of total giving.
But this 80/20 rule calls to mind something else—an iceberg, where only 20% of the berg is visible above the surface and the other 80% is submerged and hidden. In the iceberg metaphor, we ignore the hidden 80% at our own peril. In reality, the same is true for our alumni.
Though the Pareto principle does hold true for alumni giving, our alumni communities are not simply pyramids with wealth concentrated at the top. They are complicated ecosystems of human beings who contribute to their alma maters in different ways, and we need to understand them as such if our institutions are to survive and prosper.
Non-financial contributions still affect the institution’s bottom line
We all know alumni who can’t or don’t give back to their alma mater financially but make other contributions to the institution. Some of them are the volunteers who keep our programs running; others offer advice to students and their younger counterparts.
Though these alumni don’t write checks to the institution, they still have an impact on its bottom line. Ron Cohen, vice president emeritus for university relations at Susquehanna University, cites the example of one alumnus whose work as an admissions volunteer generated hundreds of thousands of dollars in revenue for his alma mater. Other alumni deliver thousands of dollars worth of services as mentors and speakers for students. Marquee events like reunions couldn’t get off the ground without the logistical work of class volunteers and others.
Not to mention the immediate returns we see from alumni engaged in “friendraising” or the long-term effect that alumni career networking has on alumni capacity to give.
Of the three points in the mnemonic, “time, talent, and treasure,” we tend only to count the value of the last one, but alumni volunteers’ time and talent save and generate vital sums of money. 20% of alumni may account for 80% of total alumni giving, but the other 80% of alumni generate immense, uncounted value that our institutions rely on.
Community really does matter to alumni
“Community” is the wishy-washy feel-good stuff of the alumni relations of yesteryear, right?
Well, no. Community is actually a vital part of any fundraising operation. And every community comprises alumni who give and alumni who don’t. In order to maintain relationships with the former group, we have to take care of both. Here, I’ll make two cases for the importance of community.
For the first, I’ll use an ecological metaphor because communities are a lot like ecosystems. In any ecosystem, there is a network of actors who depend on one another in myriad ways to survive. We humans have a tendency to tinker with these systems to maximize those aspects of them which are most beneficial to us, but in simplifying ecosystems, we often damage them. When we practice monocrop agriculture, for example, we dismantle the nutrient cycles that keep soil deep and fertile. Eventually, the soil erodes away. (Think the Dust Bowl.)
We risk a similar sort of erosion when we focus too much of our efforts on our richest and most powerful alumni. Our alumni give not just because of the relationship they had with their alma mater when they were undergraduates, but because of the relationship they continue to build after they leave. If we dispense with the come-one-come-all approach to creating an alumni family and instead create an exclusive alumni elite open only to high-rollers, we destroy the sense of community and belonging that inspires our most generous alumni to give in the first place. In short, our big alumni donors don’t appreciate when we turn our noses up at their friends.
My second metaphor has nothing to do with ecology and everything to do with behavioral economics. There is, in behavioral economics, a concept known as “loss aversion”: We dislike losing what we have more than we like gaining what we don’t. (Would you be angrier at a $50 parking ticket than you would be happy with a $50 coupon?)
One infamous example of this is American veterans’ distaste for the Red Cross. Back during World War 2, the Red Cross gave American servicemembers free donuts. In 1942, they started charging for them. Over 70 years later, many veterans still haven’t forgiven them.
If a dispute over 5 cent donuts creates that kind of long-lived animosity, imagine how our students feel when we push them out of the nest. The supportive, warm community they’re a part of on campus more or less vanishes after commencement. Even if they feel half as resentful as those veterans did after losing out on donut privileges, it won't bode well for their giving habits. We have to be there to ease them out of their campus community and ease them into their new alumni community—which means there has to be an alumni community for them to join in the first place.
Community is essential to maintain ties with all our alumni.
Engaged alumni improve the student experience, which is the biggest determinant of alumni giving
All our research to figure out what we can do to increase alumni giving has discovered one central truth: An alumna’s undergraduate experience matters far, far more than anything we can do to make her like us after she graduates.
We generally have little control over the undergraduate experience of our alumni, but there is one thing we do have the power to do. We can connect students with alumni before they leave campus. Data show that students who strike up valuable relationships with alumni are more likely to give down the line. It’s also an excellent way to keep alumni engaged; they prefer interacting with current students to interacting with our stuffy selves.
Alumni can help current students find internships, plan their academic career, and think about life after graduation. They make students' lives on campus better in addition to preparing students for the wider world. Because they are vital to our students' success, alumni are vital to our institutions' survival.
You never know who will make it big
Investing time in a broad base of alumni is a bit like investing a venture capital fund. The math of venture capital is simple: You invest in ten businesses and hope that the one that does succeed succeeds so spectacularly that it makes up for the losses of the nine that fail. (More or less. Note well that Switchboard as a company disagrees with this shotgun approach to funding.)
If we don’t similarly invest in all our alumni, we’ll make quick cynics of those who make it big when we finally come knock on their door. And to those of you astutely noting, “But we didn’t have to do that with the last generation of philanthropists,” I say: This generation of philanthropists is different. Alumni don’t give out of a sense of duty anymore. They have different reasons for giving, and we need to adapt to meet them. We have to show up.
I recently heard a joke that illustrates this point:
A man who was in financial difficulty walked into a church and started to pray. ''Listen God,'' He said. ''I know I haven't been perfect, but I really need to win the lottery. Please help me out.'' A week went by, and he hadn't won the lottery, so he knelt and prayed again. God,'' he said. ''I really need this money. My mom needs surgery, and I have bills to pay. Please let me win the lottery.'' Another week went by, and he didn't win the lottery, so he started to pray a third time. ''Please. I need this, God. Just let me win the lottery.'' Just then, he heard a voice boom from above, “For my sake, man, please, meet me halfway! Buy a lottery ticket!”
Even if spending time and resources on a broad base of alumni feels like a gamble, we have to take some risk if we want a reward.
It's important to invest time and resources in alumni who don't give and alumni who don't give very much, but we still only have so much bandwidth. There's no way we can invest an equal amount of time in every alumnus and alumna; there will always be some degree of inequity in favor of alumni who give the most.
What we can do is engage our alumni communities at scale and create programming that makes them all feel included and appreciated without our having to invest punishing amounts of money and staff time.
Our challenge is not to squeeze even more out of alumni at the top, but rather to find sustainable ways to strengthen our relationships with alumni on every rung of the ladder.